Asia report: Markets rebound from tariff-fuelled sell-off

8th Apr 2025 09:12

(Sharecast News) - Asia-Pacific equities rebounded strongly on Tuesday, recovering from steep losses in the prior session triggered by renewed trade tensions.

Investors returned to risk assets despite lingering uncertainty over US president Donald Trump's tariff policy, including threats of even higher tariffs on Chinese goods.

"Stocks in Asia bounced back after suffering historic losses, with Japan at the forefront of the recovery due to positive sentiment about its potential prioritisation in US trade talks," said TickMill market strategy partner Patrick Munnelly.

"Following a steep selloff on Monday, Treasuries also saw an uptick.

"Key indices in Japan soared over 5%, mirroring the rise in futures markets in the US and Europe."

Munnelly noted that markets in Hong Kong and China also experienced gains, after state-sponsored funds intervened to buy assets and the central bank offered loans aimed at market stabilisation.

"Volatility has surged, with global equity markets losing $10trn since the US announced extensive tariffs last week.

"With rising worries about a global recession and a worsening trade conflict, investors are searching for any signs of relief.

"Currently, president Trump has warned of imposing additional 50% tariffs on China while still leaving the door open for further discussions."

Markets rebound from tariff-fuelled sell-off

Japan led the regional gains, with the Nikkei 225 surging 6.03% to close at 33,012.58, and the broader Topix climbing 6.26% to 2,432.02.

Shares of Fujikura, Japan Steel Works, and Sumitomo Electric Industries jumped 19.48%, 18.11%, and 14.74%, respectively, reflecting renewed optimism among exporters and industrial firms.

Chinese markets also advanced, with the Shanghai Composite rising 1.58% to 3,145.55 and the Shenzhen Component up 0.64% to 9,424.68.

Top gainers included Gansu Yasheng Industrial Group, V V Food & Beverage, and Greattown Holdings, each gaining over 10%.

In Hong Kong, the Hang Seng Index climbed 1.51% to 20,127.68, supported by strong performances from Chow Tai Fook Jewellery, JD.com, and NetEase.

South Korea's Kospi 100 posted a more modest gain of 0.13% to end at 2,333.54.

Hanwha Techwin, Hanwha Ocean, and Hanmi Pharm each rose over 7%, helping limit broader market hesitancy amid geopolitical and trade uncertainties.

Australia's S&P/ASX 200 index added 2.27% to 7,510.00, lifted by strong moves in Appen, Whitehaven Coal, and Mesoblast.

Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.98% to 11,891.44, bolstered by dairy and agricultural stocks, including Fonterra Shareholders Fund and Synlait Milk.

In currency markets, the dollar was last down 0.39% on the yen, trading at JPY 147.27, as it weakened 1.2% against the Aussie to AUD 1.6509, and retreated 1.05% from the Kiwi, changing hands at NZD 1.7862.

Oil prices edged slightly lower, with Brent crude futures last down 0.2% on ICE to $64.08 per barrel, and the NYMEX quote for West Texas Intermediate easing 0.15% to $60.61.

China, Singapore join global rebuke of Trump's tariff stance

In geopolitical developments, China on Tuesday strongly condemned the latest US tariff threats, signaling a deepening rift in global trade relations.

In a statement, the Commerce Ministry said it "resolutely opposes" US president Donald Trump's plan to raise duties on Chinese imports by 50% unless Beijing removes the 34% tariffs it imposed last week.

Calling the US stance a "mistake on top of a mistake", the ministry warned of firm countermeasures and declared that China would "fight to the end" if Washington proceeded.

The sharp rhetoric came amid growing global concern about the economic fallout of intensifying trade disputes.

In Singapore, prime minister Lawrence Wong warned that escalating tensions could have "disastrous" consequences for the global economy.

Addressing parliament, Wong criticized the US for adopting protectionist measures and reaffirmed Singapore's commitment to free trade.

He noted that Singapore, which already imposes no tariffs on US goods, would now face 10% duties under the new US levies, despite maintaining a trade deficit with America.

In Australia, the rising uncertainty appeared to be weighing on consumer sentiment.

The Westpac-Melbourne Institute consumer sentiment index fell 6% in April to 90.1, marking its lowest level in six months.

Confidence was notably weaker among those surveyed after the US tariff announcement, with expectations of interest rate cuts failing to lift sentiment.

Business conditions in Australia, however, remained broadly steady in March, according to NAB's latest monthly survey.

The business confidence index slipped one point to -3, with mixed readings across industries.

Conditions remained strongest in services, while manufacturing and retail continued to lag.

Capacity utilisation rose to 82.9%, the highest since September 2024, and forward orders and capital expenditure posted modest gains.

Reporting by Josh White for Sharecast.com.